The post BOJ to Start Selling $534B in ETFs as Rate Hike Looms; Bitcoin Under Pressure? appeared first on Coinpedia Fintech News
As early as January, the Bank of Japan (BOJ) is expected to begin selling its massive ETF holdings, a portfolio valued at ¥83 trillion ($534 billion). The plan is to move slowly and avoid market shock. But even a gradual exit from ETFs by one of the world’s biggest central banks carries weight, especially at a time when global liquidity is tightening.
See how this could affect the markets.
Bank of Japan Prepares to Start Selling ETFs
According to Bloomberg, BOJ officials plan to offload ETFs gradually following a decision made at the September policy board meeting. The central bank has set a pace of ¥330 billion per year based on book value, a timeline that could stretch for decades.
The goal is to keep the impact minimal. Officials want the market response to be barely noticeable, similar to how Japan sold bank stocks in the 2000s without disrupting markets.
Still, the scale is hard to ignore. The ETF holdings have grown sharply in value as Japan’s stock market rallied over the past two years, leaving the BOJ with massive unrealized gains.
Rate Hike Expectations Add More Pressure
The ETF exit comes as markets expect a 25 basis point rate hike at the BOJ’s December 18-19 meeting. Polymarket currently shows a 98% probability of a hike, which would take Japan’s policy rate to 75 basis points, the highest level in nearly 20 years.
That shift matters because Japan has long been the world’s cheapest source of leverage.
“For decades, the Yen has been the #1 currency people would borrow & convert into other currencies & assets… That carry trade is diminishing now, as Japanese bond yields are rising rapidly,” wrote analyst Mister Crypto.
The
Bank of Japan is about to do a rate hike on Friday the 19th, creating massive fear surrounding the Yen carry trade.
Bitcoin dumped hard the last time they hiked rates:
But why is this exactly? Let’s break it down
What is the Yen Carry Trade?
For decades, the Yen has… pic.twitter.com/YjxzOctjnx
— Mister Crypto (@misterrcrypto) December 14, 2025
Why Bitcoin Is Feeling the Impact
As yen-funded leverage comes under strain, risk assets are vulnerable. Bitcoin is already trading below the $90,000 level, sitting at $89,701 currently.
That said, the market response has been relatively controlled. Many analysts note that expectations around a Bank of Japan rate hike have been circulating for weeks, giving traders time to adjust positioning. In that sense, part of the impact may already be reflected in current prices.
While markets are clearly paying attention, there is no sign of disorderly selling so far, suggesting investors are treating this as a macro adjustment rather than a sudden risk event.’
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FAQs
The BOJ is selling its ETFs to normalize monetary policy after years of stimulus, but it plans to sell so gradually that the market impact is designed to be “almost unnoticeable”.
A BOJ interest rate hike and ETF sales could pressure Bitcoin by reducing global market liquidity. This could weaken the popular “yen carry trade,” where investors borrow cheap yen to buy riskier assets like crypto.
BOJ is expected to begin its ETF sales in January, moving slowly over the years to avoid sudden market reactions.
